Foreign Domestic Helpers in Hong Kong - Employees' Retraining Levy Waiver Controversy

Employees' Retraining Levy Waiver Controversy

As part of the "extraordinary measures for extraordinary times" totalling HK$11 billion announced by Donald Tsang on 16 July 2008, the levy would be temporarily waived, at an estimated cost of HK$2 billion. The measures were mockingly referred to in the Chinese press as 派糖—handing out candy.

It was announced that the levy would be waived for a two-year period on all helpers' employment contracts signed on or after 1 September 2008, and would not apply to ongoing contracts. The Immigration Department said it would not reimburse levies, which are prepaid half-yearly. The announcement resulted in chaos and confusion, and uncertainty for the helpers. Chris Yeung said that the exemption was a "gimmick dressed up as an economic relief initiative, designed to boost the administration's popularity" in advance of Tsang's forthcoming policy address, in October.

Maids' representatives said that when the waiver was announced, the guidelines were unclear and had no implementation date. Employers deferred contracts or had dismissed helpers pending confirmation of the effective date, leaving helpers in limbo. They protested about the uncertainty, and also demanded an increase in their minimum wage to HK$4,000. Employers had reportedly started terminating their helpers' contracts, sparking fears of mass-terminations. On 20 July, Secretary for Labour and Welfare Matthew Cheung announced the waiver commencement date would be brought forward by one month. The Immigration Department had also temporary relaxed its 14-day re-employment requirement for helpers whose contracts expired.

On 30 July, the Executive Council approved the suspension of the levy for two years from 1 August 2008 to 31 July 2010. After widespread criticism of the situation, the government said maids having advanced renewal of contract would not be required to leave Hong Kong through the discretion exercised by the Director of Immigration, and employers would benefit from the waiver simply by renewing the contract within the two-year period. The government also admitted that some employers could benefit from the waiver for up to 4 years. This effect of turning a 2 year moratorium into 4 year suspension potentially doubles the estimated give-away, and was denounced by the newspaper editorials of all allegiances. The levy was criticised as "farcical" in an editorial in the South China Morning Post. Stephen Vines wrote that "the plan for a two-year suspension of the levy... provides an almost perfect example of government dysfunction and arrogance," while Albert Cheng said the controversy exposed "worst side of our government bureaucracy" Columnist Frank Ching criticised senior officials for living in their ivory towers, and said that there would have been no disruption if the government had suspended payment immediately and refunded those who had prepaid. Hong Kong Human Rights Monitor called for the levy's permanent abolition, saying that the temporary two-year waiver was discriminatory. It criticised the confusion and inconvenience caused to employers and the Immigration Department because the policy had not been thought through properly.